The new appraisal procedures are affecting the loan process negatively.   Presently when a home goes into escrow and a loan is needed, an appraisal is ordered to determine the market value of the home.   From that appraisal a loan value is placed on the property by the bank which generally is 80% of that market value.

          For instance, if a home is sold for $200,000 and the appraiser decided the fare market of the property to be  $180,000 the bank would only loan 80% of that figure or $144,000 on the property.  This  means that the borrower would have to put up with an additional $36,000 over what he originally planned would be his down payment.   Clearly, having to produce over twice the down payment originally planned for, the transaction generally will fail.

           Under the new program appraisers are picked from a pool and sent to appraise properties perhaps a hundred miles from areas that they are familiar with.    We have seen in practice that these appraisals  can be well off the mark with no recourse for the borrower.  This can and does result in appraisals being used that are not pertinent to an area and making it more difficult to attain loans in an already difficult loan market.

 Don Schaller

Broker/Owner

Schaller Family Realtors

Dickson Realty, Truckee

dschaller@suddenlink.net